These things take time: The Asia Development Bank cut its 2009 GDP outlook to 7% from 8.2%, basically due to the unreadiness for shovels of Beijing’s stimulus package. But in 2010, it sees China’s GDP at 8%. Be wary of these downward revisions. They seem to come in twos, a first one to take into account a few mitigating factors. A second one to reflect a mega-recession. See, for instance, the World Bank’s latest call on Russia’s GDP — from a 3% rise to a 4.5% contraction. -[]- While it waits for the effects of the first one to go through, Japan plans a second stimulus.

…and you want to defend yourself. Then point out that it wasn’t even the stupidest regulatory policy reversal of the age. (I’m obviously coming late to the action here if it’s the point the New York superintendent of insurance is making … for the second time.)

The bank panic of 1907 is remembered for J.P. Morgan forcing all the bankers to stay in a room until they agreed to contribute to fixing the crisis. What has been forgotten is one major cause of the crisis ­– unregulated speculation on the prices of securities by people who did not own them. These betting parlours, or fake exchanges, were called bucket shops because the bets were literally placed in buckets.

The states responded in 1908 by passing anti-bucket shop and gambling laws, outlawing the activity that helped to ruin that economy.[…]

But there was serious concern that swaps violated the old bucket shop laws. Thus, the Commodity Futures Modernisation Act of 2000 exempted credit default swaps from these laws. The act also exempted them from regulation by the Commodities and Futures Trading Commission and the Securities and Exchange Commission. Unregulated, the market grew enormously.

Thus, one of the major causes of the financial crisis was not how lax our regulation, or how hard we enforced, but what we chose not to regulate.

Sadly, Eric Dinallo doesn’t quite make clear in what ways the market for CDS fell foul of bucket-shop laws. Obviously, it should have raised an alarm that the law could see something in these apparently sensible and useful derivatives that looked like a casino. From links here and here, the reason is that the CDS buyers didn’t have to prove they owned Lehman Brothers bonds (as you would if you insured your house) and the sellers didn’t have to set aside capital to make good on the bet (as you would have to if you were an insurance company).

Hideous fathers: Marine Le Pen breaks with her father on her father’s surely bizarrely translated assertion that the “Holocaust was a detail of history.” (Surely detail in French must have a more dismissive ring to it than detail does in English? Otherwise, he’s undenying the Holocaust.) -[]- Along withPonzischemes, these times are bringing to light Fritzl schemes that come from ever darker regions of the human soul.

There are and there are: Among the surge of troops the U.S. is unleashing on Kabul, there will be a surge of civilians. The civilians are there to push the CIA’s understanding beyond Dennis Blair’s gnomic: “There are Taliban and Taliban.” -[]- Meanwhile, Jesse Jackson helpfully tells the British — worried about knife crime — that “There are children of the light, and there are children in the darkness.” -[]- Separately, Gordon Brown wants the Royals to marry whomever they choose, even Catholics! “But there are clear issues about the exclusion of people from the rights of succession, and there are clearly issues that have got to be dealt with not just in Britain but right across the Commonwealth,” he explains.

Odd titles: The unofficial holiday prize goes to Serf Emancipation Day, a new holiday China holds to celebrate the enslavement of Tibet. -[]- The official book prize goes to The 2009-2014 World Outlook for 60-Milligram Containers of Fromage Frais — “an area that perhaps we are all guilty of ignoring as we push our trolleys down supermarket aisles. What does the future hold for these items? Well, given that fromage frais normally comes in 60-gram containers, not 60-milligram, one would assume that the world outlook for 0.06-gram containers of fromage frais is pretty bleak. But I’m not willing to pay $795 to find out.”

The typical stages of the crisis’s sub-plots goes: a blinking red light, a sense of dread, a sense of doom, a result that exceeds your worst dreams (lehman, Iceland, Latvia). Barclays was at dread stage. For the first time, a sense of dread hasn’t been justified spectacularly. Especially if this is true.